In the world of energy-focused master limited partnerships (MLP), investors flocked to initial public offerings that owned crummy assets but promised double-digit distribution growth, while shunning time-tested winners like Enterprise Products Partners LP (NYSE: EPD) that took a more conservative tack.

How times have changed. Junk-rated corporations face much higher borrowing costs, while MLPs have started to fund scaled-back growth initiatives with cash, credit lines, asset sales and private securities transactions to avoid the public markets.

Money is tight. And individual and institutional investors’ appetite for risk continues to diminish. In this environment, companies closed out of the capital markets must fall back on their own resources until conditions improve or pair up with a stronger rival.

These challenges create massive opportunities for names with superior costs of capital, especially in a North American energy landscape that’s undergoing huge changes.

Thanks to their highly visible cash flow, utilities still enjoy low costs of capital, enabling them to pursue two major growth opportunities at the expense of the competition: the rise of gas-fired power generation and solar power.

If this looks like a small static image, your browser does not support the
canvas tag. Please try again using a different browser, or try to imagine text
swirling around in response to the mouse position.

DISCLAIMER: Capitalist Times, LLC is a publisher of financial news and opinions and NOT a securities broker/dealer or an investment advisor. You are responsible for your own investment decisions. All information contained in our newsletters or on our website(s) should be independently verified with the companies mentioned, and readers should always conduct their own research and due diligence and consider obtaining professional advice before making any investment decision. As a condition to accessing Capitalist Times materials and websites, you agree to our Terms and Conditions of Use, available here including without limitation all disclaimers of warranties and limitations on liability contained therein. Owners, employees and writers may hold positions in the securities that are discussed in our newsletters or on our website.